HF 2449

as introduced - 91st Legislature (2019 - 2020) Posted on 03/13/2019 11:21am

A bill for an act
relating to economic development; creating a Minnesota Innovation Collaborative;
authorizing grants; appropriating money.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1. new text begin MINNESOTA INNOVATION COLLABORATIVE.
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new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin The Minnesota Innovation Collaborative is established
within the Business and Community Development Division of the Department of
Employment and Economic Development to encourage and support the development of
new private sector technologies and support the science and technology policies under
Minnesota Statutes, section 3.222. The Minnesota Innovation Collaborative must provide
entrepreneurs and emerging technology-based companies business development assistance
and financial assistance to spur growth.
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new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the terms defined in this subdivision
have the meanings given.
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new text begin (b) "Advisory board" means the board established under subdivision 11.
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new text begin (c) "Commissioner" means the commissioner of employment and economic development.
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new text begin (d) "Department" means the Department of Employment and Economic Development.
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new text begin (e) "Entrepreneur" means a Minnesota resident who is involved in establishing a business
entity and secures resources directed to its growth while bearing the risk of loss.
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new text begin (f) "Greater Minnesota" means the area of Minnesota located outside of the metropolitan
area as defined in section 473.121, subdivision 2.
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new text begin (g) "High technology" includes aerospace, agricultural processing, renewable energy,
energy efficiency and conservation, environmental engineering, food technology, cellulosic
ethanol, information technology, materials science technology, nanotechnology,
telecommunications, biotechnology, medical device products, pharmaceuticals, diagnostics,
biologicals, chemistry, veterinary science, and similar fields.
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new text begin (h) "Institution of higher education" has the meaning given in Minnesota Statutes, section
136A.28, subdivision 6.
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new text begin (i) "Minority group member" means a United States citizen who is Asian, Pacific Islander,
Black, Hispanic, or Native American.
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new text begin (j) "Minority-owned business" means a business for which one or more minority group
members:
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new text begin (1) own at least 50 percent of the business or, in the case of a publicly owned business,
own at least 51 percent of the stock; and
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new text begin (2) manage the business and control the daily business operations.
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new text begin (k) "Research and development" means any activity that is:
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new text begin (1) a systematic, intensive study directed toward greater knowledge or understanding
of the subject studies;
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new text begin (2) a systematic study directed specifically toward applying new knowledge to meet a
recognized need; or
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new text begin (3) a systematic application of knowledge toward the production of useful materials,
devices, systems and methods, including design, development and improvement of prototypes
and new processes to meet specific requirements.
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new text begin (l) "Start-up" means a business entity that has been in operation for less than ten years,
has operations in Minnesota, and is in the development stage defined as devoting substantially
all of its efforts to establishing a new business and either of the following conditions exists:
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new text begin (1) planned principal operations have not commenced; or
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new text begin (2) planned principal operations have commenced, but have generated less than
$1,000,000 in revenue.
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new text begin (m) "Technology-related assistance" means the application and utilization of
technological-information and technologies to assist in the development and production of
new technology-related products or services or to increase the productivity or otherwise
enhance the production or delivery of existing products or services.
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new text begin (n) "Trade association" means a nonprofit membership organization organized to promote
businesses and business conditions and having an election under Internal Revenue Code
section 501(c)(3) or 501(c)(6).
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new text begin (o) "Women" means persons of the female gender.
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new text begin (p) "Women-owned business" means a business for which one or more women:
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new text begin (1) own at least 50 percent of the business or, in the case of a publicly owned business,
own at least 51 percent of the stock; and
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new text begin (2) manage the business and control the daily business operations.
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new text begin Subd. 3. new text end

new text begin Duties. new text end

new text begin The Minnesota Innovation Collaborative shall:
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new text begin (1) support innovation and initiatives designed to accelerate the growth of high-technology
start-ups in Minnesota;
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new text begin (2) offer classes and instructional sessions on how to start a high-tech and innovative
start-up;
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new text begin (3) promote activities for entrepreneurs and investors regarding the state's growing
innovation economy;
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new text begin (4) hold events and meetings that gather key stakeholders in the state's innovation sector;
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new text begin (5) conduct outreach and education on innovation activities and related financial programs
available from the department and other organizations, particularly for underserved
communities;
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new text begin (6) interact and collaborate with statewide partners including but not limited to businesses,
nonprofits, trade associations, and higher education institutions;
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new text begin (7) administer an advisory board to assist with direction, grant application review,
program evaluation, report development, and partnerships;
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new text begin (8) commission research in partnership with the University of Minnesota and Minnesota
State Colleges and Universities to study innovation and its impacts on the state's economy
with emphasis on the state's labor market;
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new text begin (9) accept grant applications under subdivisions 5 and 6 and work with the advisory
board to evaluate the applications and provide funding recommendations to the commissioner;
and
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new text begin (10) perform other duties at the commissioner's discretion.
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new text begin Subd. 4. new text end

new text begin Administration. new text end

new text begin (a) The department shall employ an executive director in the
unclassified service. The executive director shall:
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new text begin (1) hire no more than two staff;
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new text begin (2) assist the commissioner and the advisory board in performing the duties of the
Minnesota Innovation Collaborative; and
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new text begin (3) comply with all state and federal program requirements, and all state and federal
securities and tax laws and regulations.
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new text begin (b) To the extent possible, the space that the Minnesota Innovation Collaborative shall
occupy and lease must be a private coworking facility that includes office space for staff
and space for community engagement for training entrepreneurs. The space leased under
this paragraph is exempt from the requirements in Minnesota Statutes, section 16B.24,
subdivision 6.
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new text begin (c) Except for grants under subdivision 7, the Minnesota Innovation Collaborative must
accept grant applications under this section and provide funding recommendations to the
commissioner, who shall distribute grants based in part on the recommendations.
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new text begin Subd. 5. new text end

new text begin Application process. new text end

new text begin (a) The commissioner shall establish the application form
and procedures for innovation grants.
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new text begin (b) Upon receiving recommendations from the Minnesota Innovation Collaborative
under subdivision 4, paragraph (c), the department is responsible for evaluating all
applications using evaluation criteria developed by the Minnesota Innovation Collaborative,
the advisory board, and the commissioner. Priority shall be given if the applicant is:
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new text begin (1) a business or entrepreneur located in greater Minnesota; or
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new text begin (2) a business owner or entrepreneur who is a woman or minority group member.
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new text begin (c) The department staff, and not the Minnesota Innovation Collaborative staff, is
responsible for awarding funding, disbursing funds, and monitoring grantee performance
for all grants awarded under this section.
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new text begin (d) Grantees must provide matching funds by equal expenditures and grant payments
must be provided on a reimbursement basis after review of submitted receipts by the
department.
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new text begin (e) Grant applications must be accepted on a regular periodic basis by the Minnesota
Innovation Collaborative and must be reviewed by the collaborative and the advisory board
before being submitted to the commissioner with their recommendations.
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new text begin Subd. 6. new text end

new text begin Innovation grants. new text end

new text begin (a) The commissioner shall distribute innovation grants
under this subdivision.
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new text begin (b) The commissioner shall provide a grant of up to $50,000 to an eligible business or
entrepreneur for research and development expenses. Research and development expenditures
may be related but not limited to proof of concept activities, intellectual property protection,
prototype designs and production, and commercial feasibility. Expenditures funded under
this subdivision are not eligible for the research and development tax credit under Minnesota
Statutes, section 290.068. Each business or entrepreneur may receive only one grant under
this paragraph.
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new text begin (c) The commissioner shall provide a grant of up to $25,000 to an eligible start-up or
entrepreneur for direct business expenses including but not limited to rent, equipment
purchases, supplier invoices, and staffing. Taxes imposed by the federal, state, or local
government entities may be not be reimbursed under this paragraph. Each start-up or
entrepreneur may receive only one grant under this paragraph.
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new text begin (d) The commissioner shall provide a grant of up to $7,500 to reimburse an entrepreneur
for health care, housing, or child care expenses for the entrepreneur, spouse, or children 26
years of age or younger. Each entrepreneur may receive only one grant under this paragraph.
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new text begin (e) The commissioner shall provide a grant of up to $50,000 to an eligible business or
entrepreneur that, as a registered client of the Small Business Innovation Research (SBIR)
program, has been awarded a Phase 2 award pursuant to the SBIR or Small Business
Technology Transfer (STTR) programs after July 1, 2019. Each business or entrepreneur
may receive only one grant under this paragraph. Grants under this paragraph are not subject
to the requirements of subdivision 2, paragraph (l), and are awarded without the review or
recommendation of the Minnesota Innovation Collaborative.
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new text begin (f) The commissioner shall provide a grant of up to $25,000 to provide financing to
start-ups to purchase technical assistance and services from public higher education
institutions and nonprofit entities to assist in the development or commercialization of
innovative new products or services.
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new text begin Subd. 7. new text end

new text begin Entrepreneur education grants. new text end

new text begin (a) The commissioner shall make entrepreneur
education grants to institutions of higher education and other organizations to provide
educational programming to entrepreneurs and provide outreach to and collaboration with
businesses, federal and state agencies, institutions of higher education, trade associations,
and other organizations working to advance innovative, high technology businesses
throughout Minnesota.
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new text begin (b) Applications for entrepreneur education grants under this subdivision must be
submitted to the commissioner and evaluated by department staff other than the Minnesota
Innovation Collaborative. The evaluation criteria must be developed by the Minnesota
Innovation Collaborative, the advisory board, and the commissioner with priority given to
an applicant who demonstrates activity assisting businesses or entrepreneurs residing in
greater Minnesota or who are women or minority group members.
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new text begin (c) Department staff other than the Minnesota Innovation Collaborative staff is responsible
for awarding funding, disbursing funds, and monitoring grantee performance under this
subdivision.
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new text begin (d) Grantees may use the grant funds to deliver the following services:
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new text begin (1) development and delivery to high technology businesses of industry specific or
innovative product or process specific counseling on issues of business formation, market
structure, market research and strategies, securing first mover advantage or overcoming
barriers to entry, protecting intellectual property, and securing debt or equity capital. This
counseling is to be delivered in a classroom setting or using distance media presentations;
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new text begin (2) outreach and education to businesses and organizations on the small business
investment tax credit program under Minnesota Statutes, section 116J.8737, the MNvest
crowd-funding program under Minnesota Statutes, section 80A.461, and other state programs
that support high technology business creation especially in underserved communities;
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new text begin (3) collaboration with institutions of higher education, local organizations, federal and
state agencies, the Small Business Development Center, and the Small Business Assistance
Office to create and offer educational programming and ongoing counseling in greater
Minnesota that is consistent with those services offered in the metropolitan area; and
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new text begin (4) events and meetings with other innovation-related organizations to inform
entrepreneurs and potential investors about Minnesota's growing information economy.
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new text begin Subd. 8. new text end

new text begin Report. new text end

new text begin The Minnesota Innovation Collaborative shall report by February 1,
2020, and again on February 1, 2021, to the chairs and ranking minority members of the
committees of the house of representatives and senate having jurisdiction over economic
development policy and finance issues on the work completed, including awards made by
the department under this section.
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new text begin Subd. 9. new text end

new text begin Advisory board. new text end

new text begin (a) The commissioner shall establish an advisory board to
advise the executive director regarding the activities of the Minnesota Innovation
Collaborative and to perform the recommendations described in this section.
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new text begin (b) The advisory board shall consist of ten members and is governed by Minnesota
Statutes, section 15.059. A minimum of six members must be from the private sector
representing business and at least two members but no more than four members from
government and higher education. Appointees shall represent a range of interests, including
entrepreneurs, large businesses, industry organizations, investors, and both public and private
small business service providers.
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new text begin (c) The advisory board shall select a chair from its private sector members. The executive
director shall provide administrative support to the committee.
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Sec. 2. new text begin APPROPRIATION.
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new text begin $4,500,000 in fiscal year 2020 and $4,500,000 in fiscal year 2021 are appropriated to
the commissioner of employment and economic development for the Minnesota Innovation
Collaborative. Of this amount:
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new text begin (1) $2,900,000 each year is for innovation grants to eligible Minnesota entrepreneurs or
start-up businesses to assist with their operating needs. Of this amount, five percent is for
the department's administrative costs;
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new text begin (2) $850,000 each year is for administration of the Minnesota Innovation Collaborative;
and
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new text begin (3) $750,000 each year is for grantee activities at the Minnesota Innovation Collaborative.
Of this amount, five percent is for the department's administrative costs.
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new text begin This is a onetime appropriation and funds are available until June 30, 2023.
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